Repossession by a landlord's lender
Repossession by a landlord’s mortgage lender occurs because the landlord you are renting from has not been keeping up to date with the mortgage repayments on the property.
Following a joint campaign by Shelter and our partners, most private tenants have had stronger rights since 1 October 2010.
In some cases, the lender will become your landlord after it repossesses the property from your landlord. This happens only if your tenancy is binding on the landlord’s lender, and the new law does not affect these cases.
You will need to take action quickly if you want to delay the eviction. The procedure the lender has to follow to evict you will depend on whether your tenancy is binding on the landlord's lender, and on the type of tenancy you have. This page should help you to work out which set of rules apply to you, and when you need to seek advice.
Most tenancies are not binding on the landlord’s lender but you may have a binding tenancy if:
- your landlord had a buy-to-let mortgage
- the lender gave permission for the landlord to grant the tenancy
- the landlord's lender has recognised the tenancy in some way – eg by asking you to pay rent direct to them or by accepting rent from you (although it does not count if this arrangement was made as part of an agreement to delay the date of possession for a non-binding tenancy – see below).
- you were already living in the property at the time the mortgage was granted
- the property was sold to the current landlord after your tenancy started.
If you are unsure about when your landlord's mortgage started, you can ask the landlord or the lender to confirm this. You can also search for this information on the Land Registry website, although you will have to pay a £4 fee for this.
Lenders are often unaware that a property has been rented out to tenants, so in the past it was common for the lender to instruct the court bailiffs to repossess the property before the tenants were even aware that there was a problem.
However, most tenants should now become aware of the problem earlier. More importantly, you can now apply for the eviction to be postponed for up to two months if you need more time to find somewhere else to live.
Most private tenants with tenancies that are not binding on the landlord’s lender will be protected by this new law. The only exceptions are:
If you have an assured shorthold tenancy, an assured tenancy or a regulated tenancy, the lender must:
- send a notice to the property before the repossession hearing informing ‘the tenant or occupier’ (ie everyone living there) of the date of the hearing. They have to do this within five days of the hearing date being confirmed by the court. Never assume that post addressed to 'the tenant or occupier' is junk mail.
- send a second notice to the property by first class post, recorded delivery or by hand, to inform you that the lender is going to ask the bailiffs to carry out an eviction. This will only happen if the court has already made a possession order. A special form must be used for this notice (you can download a sample of the form). The bailiffs cannot evict you for at least 14 days after the landlord has given this notice.
You can ask for the repossession to be delayed for up to two months at any one of these points in the process:
- at the repossession hearing
- after the court has made an order for possession
- at the warrant stage.
It is important to be aware that in some cases the court hearing may have already taken place before your tenancy started. If this is the case you will only receive one notice (the second one). It is therefore advisable to take action to delay the eviction as soon as you receive anything in writing. If you cannot work out what stage of the repossession procedure has been reached, get advice (see below).
As soon as you become aware that repossession is a possibility, you should contact the lender and ask them to delay repossession for up to two months to give you more time to find somewhere to live.
If the lender does not agree to give you more time, you should then contact the court to request that they order the lender to delay possession to give you time to find alternative accommodation.
You must have asked the lender first (and been refused, or not received any response) before you ask the court to make an order.
You will need to use Court Service form N244. You should send it to the court where the hearing will be/has been held – their contact details should be on any notices you have received.
Provide any relevant documents and information that will help the court to understand your situation, including:
- a copy of your tenancy agreement (if you have one)
- any proof that you have of rent payments (eg a rent book or details of payments)
For some households, it may be particularly difficult to find somewhere else suitable – eg if you need wheelchair access or a large property. If you are in this situation, you should explain your circumstances and confirm any steps you have already taken to find somewhere (eg signing up with letting agencies or applying as homeless).
The court will also consider:
- your personal circumstances (eg if anyone in your household is vulnerable and/or if the type of accommodation you need is difficult to find quickly
- whether you have broken any of the terms and conditions of your tenancy (eg if you have rent arrears, have behaved antisocially or have caused damage to the property)
- whether the lender will suffer hardship as a result of delaying the eviction.
The court may decide to delay the eviction but impose conditions. For example, you may have to pay rent directly to the lender as a condition of delaying the repossession. This does not mean that your tenancy becomes binding.
In addition to seeking a 2 months’ delay in the lender obtaining a date for eviction, you may be able to:
- persuade the lender to take over as landlord and/or give you more time to find another place to live. For example, if you have a fixed term tenancy, they may be willing to allow you to stay until the end of the fixed term, although they are not legally required to do so.
- use publicity - local and national media may be interested to hear about tenants who are the innocent victims of repossession. Publicity may encourage the lender to allow you to stay on.
If your tenancy is binding on the landlord's lender, this means that the lender will become your landlord when they get a court order to repossess the property. The order for repossession does not affect your rights as a tenant. The lender will need to apply for a separate court order when it wants to evict you. The procedures involved depend on the type of tenancy you have.
To repossess the property from the landlord, the lender first has to arrange a court hearing and then get a court order.
In every case, lenders must send a notice to the property before the repossession hearing, addressed to ‘the tenant or the occupier’. They have to do this within five days of starting the court proceedings. Always make sure you open post addressed to 'the occupiers' - do not assume that it is junk mail!
If you believe you have a binding tenancy, but the lender has not made any contact with you to confirm this, you should contact the lender as soon as you find out that repossession is a possibility:
- Ask them to confirm in writing that your tenancy is binding.
- Enclose a photocopy of your written tenancy agreement (if you have one) and/or any other evidence that shows that your tenancy is binding.
- Ask what they intend to do with the property – will they be seeking to evict you once the correct procedure has been followed?
- Ask how future rent payments should be paid and how any deposit you have paid will be returned to you.
If the lender refuses to confirm your status, or says that your tenancy is not binding and court action has started, you may be able to ask the court for an adjournment to give you more time to get legal advice. Get advice immediately to check your rights and find out how to present your argument. Use our directory to find an advice service in your area.
Remember that as your landlord, the lender must follow the correct procedure if they want to evict you.
In most cases the lender will be able to evict you eventually, but they must follow the correct procedures, which depend on the type of tenancy you have. You will continue to have the same type of tenancy that you had before, so your rights remain unchanged:
- If you do not know what type of tenancy you have, user our eviction checker to find out about the procedures involved.
- f you have an assured shorthold tenancy, or an assured tenancy, there is a special ground that lenders can use to evict tenants from repossessed properties. You are normally entitled to two months’ notice, but if the lender uses another legal reason for the eviction (eg because you have rent arrears or have caused damage to the property) then you may only be entitled to two weeks’ notice. See our pages on Eviction of assured shorthold tenants and Eviction of assured tenants for more information.
- If your tenancy started before 15 January 1989 you probably have a regulated tenancy. If this is the case, you have more protection from eviction than other private tenants and should contact an adviser immediately if the lender attempts to evict you.
- If you are an excluded occupier or an occupier with basic protection you have very limited security. You are likely to fall into one of these categories if you live in the same building as your landlord, you don’t pay any rent, or you live in a holiday let. You should start looking for somewhere else to live immediately and get advice if you have problems (see below).
You can seek compensation from the landlord but should bear in mind that this may involve paying some legal costs, although the landlord may be ordered to pay these for you if you are successful. However, as the landlord may not have much money left after the mortgage has been repaid, it may be difficult to enforce any order the court makes.
If you do decide to seek compensation, the court can award damages for loss of the tenancy and/or for storage and emergency accommodation costs. The court cannot order that you should be allowed to move back into the property.
Get advice immediately if you are a tenant and you know that repossession proceedings have been started.
A housing adviser may be able to help you work out the following questions:
- What stage of the repossession procedure has been reached?
- Is there is any possibility of stopping or delaying the eviction?
- Is your tenancy binding on the landlord's lender?
- Are you entitled to help from the council if you are evicted - use our emergency housing rights checker to see what help is available
- What are your alternative housing options?
Use our directory to find an advice service in your area.
The UK Government has produced guidance to inform lenders, landlords and tenants of their new rights and responsibilities. You can download this guidance from Gov.uk.